Tech stocks and healthcare star in a rally
Wall Street closed out the week with more milestones Friday as the Dow Jones industrial average surpassed 28,000 points for the first time and the Standard & Poor’s 500 index and Nasdaq also set record highs.
Healthcare and technology stocks powered most of the broad rally, which helped drive the S&P 500 to its sixth straight weekly gain. The Dow is on a four-week win streak.
Investors have been encouraged by surprisingly good corporate earnings, three interest rate cuts by the Federal Reserve and data showing that the U.S. economy is still growing solidly. Hopes that the United States and China can make progress in their latest push for a trade deal have also helped keep investors in a buying mood.
“Over the past week, the market absorbed a number of challenging trade headlines, and it didn’t go down,” said Willie Delwiche, investment strategist at Baird. “It might just be the case that with positive momentum, after not having had a chance to pull the market down, the bulls stepped in again and said, ‘Let’s keep this thing going.’ ”
The S&P 500 index rose 23.83 points, or 0.8%, to 3,120.46.
The Dow advanced 222.93 points, or 0.8%, to 28,004.89. The Nasdaq composite climbed 61.81 points, or 0.7%, to 8,540.83. The Russell 2000 index of smaller companies rose 7.66 points, or 0.5%, to 1,596.45.
The S&P, Dow and Nasdaq are now all up more than 20% for the year.
Bond prices fell Friday, pushing yields higher, a signal that investors were shifting away from safe-play holdings. The yield on the 10year Treasury rose to 1.84% from 1.81%.
Traders hope the world’s two biggest economies can make a deal before new and more damaging tariffs take effect next month. Beijing is pressing Washington to roll back tariffs as part of a potential deal that the nations are trying to hammer out.
Investors mostly shrugged off news reports this week suggesting that trade talks have hit a snag. On Friday, Commerce Secretary Wilbur Ross told Fox Business that it is likely a trade deal will get done, though he said it’s possible that a pact could unravel at the last minute as it did when both sides got close to a deal in May.
A report showing U.S. retail sales rebounded a modest 0.3% in October after falling the previous month also encouraged traders. J.C. Penney surged after it raised its profit forecast.
Healthcare stocks jumped Friday, with insurers getting a boost after the Trump administration officially announced a rule that would require hospitals and other providers to make public the rates for drugs, doctor visits and other services and Democratic presidential candidate Elizabeth Warren provided details on her “Medicare for all” plan.
Humana climbed 5.5%, UnitedHealth Group rose 5.3%, and Anthem gained 5.6%.
Technology stocks also notched solid gains. Applied Materials jumped 9%, the biggest gain in the S&P 500, after reporting solid quarterly earnings.
The materials sector was the only sector to slip. Utilities and makers of household goods posted the smallest gains as investors turned away from less risky, defensive stocks.
Home furnishings firm RH climbed 7.6%, and energy company Occidental Petroleum gained 2.9% after Warren Buffett’s Berkshire Hathaway disclosed that it had picked up shares of both companies.
Benchmark crude oil rose 95 cents to settle at $57.72 a barrel. Brent crude, the international standard, rose $1.02 to close at $63.30 a barrel. Wholesale gasoline rose 2 cents, to $1.64 a gallon. Heating oil climbed 3 cents, to $1.95 a gallon. Natural gas rose 4 cents, to $2.69 per 1,000 cubic feet.
Gold fell $4.50, to $1,467.30 an ounce. Silver fell 8 cents, to $16.93 an ounce. Copper rose 2 cents, to $2.64 a pound.